Last week, the PSEi fell slightly by 0.93% week-on-week, closing at 6,897.54. The market faced selling pressures due to a drop in US tech shares at the early part of the week as well as the effectivity of the MSCI Quarterly Index Review on August 30, 2024. There were no changes to the composition of the MSCI Philippines Standard Index, although the country received a slight downweight of 0.009%. For the MSCI Philippines Small Cap Index, DigiPlus Interactive Corp. (PLUS) was added, and Security Bank Corp. (SECB) was deleted. On a separate note, key international data releases were received positively, particularly following the upward revision in US 2Q 2024 GDP at 3% (from 2.8%), calming recession fears.<\/p>\n\n\n\n
This week, we anticipate positive sentiment to dominate in anticipation of increased consumer spending as the \u201cber\u201d months begin. The Philippine Retailers Association (PRA) mentioned that sales typically start to increase in September due to Filipinos\u2019 tradition of gift-giving, coupled with retailers offering promotions and discounts.<\/p>\n\n\n\n
Additionally, the Bangko Sentral ng Pilipinas (BSP) has projected August 2024 inflation to fall between 3.2% and 4% (July: 4.4%), within the government\u2019s 2% to 4% target range. However, local pump prices could dampen sentiment due to supply issues in the Middle East and a decline in Libya\u2019s oil production caused by political unrest. Projected fuel price changes include gasoline increasing by PHP0.20 to PHP0.45 per litre, diesel by PHP0.00 to PHP0.20 per litre, and kerosene by PHP0.45 to PHP0.55 per litre.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Lighten Position<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 47.56<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n The stock is currently in a pronounced downtrend, trading within a clearly defined descending channel and below all major moving averages, indicating strong bearish momentum. The RSI at 40.52 suggests the stock is nearing oversold territory, which may lead to a short-term bounce; however, the overall trend remains downward. The next significant support level is at PHP 28.70, and unless a major catalyst emerges, the bearish trend is expected to persist. <\/p>\n\n\n\n Caution is advised for any long positions, and lightening up on the stock is recommended given its current trajectory. Reducing positions at current levels is advisable. If the stock continues its decline, the next support level is around PHP 28.00<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Robinsons Retail Holdings, Inc. (RRHI)<\/h3>\n\n\n\n
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